What is the State of Logistics report and why do supply chain professionals use it?

The State of Logistics is an annual comprehensive industry report published by Logistics Management that analyzes performance metrics, cost trends, capacity utilization, and market dynamics across all major logistics modes including air cargo. Supply chain professionals use it as a benchmarking tool to understand industry-wide conditions, validate their own operational performance, and anticipate market shifts affecting transportation strategy.

How does air cargo fit into a balanced transportation strategy?

Air cargo serves specialized roles in supply chain networks: emergency expediting, long-haul movement of high-value or time-sensitive goods (electronics, pharmaceuticals, perishables), and backup capacity when ocean or ground routes are constrained. While significantly more expensive than ocean or rail, air freight reduces inventory carrying costs for fast-moving items and enables just-in-time manufacturing models where lead time is critical.

What market pressures are currently affecting air cargo capacity and pricing?

The 37th State of Logistics report analyzes post-pandemic recovery dynamics, including carrier consolidation, fuel surcharges, labor cost inflation, and cyclical demand shifts driven by e-commerce growth and inventory correction cycles. These factors create both capacity constraints and pricing volatility that logistics teams must navigate when sourcing air freight services.

How should companies adjust their air freight strategy based on industry trends?

Supply chain teams should: (1) diversify carrier relationships to reduce single-carrier dependency; (2) lock in capacity commitments during soft markets; (3) establish clear thresholds for when air freight is economically justified; (4) invest in demand visibility to reduce emergency shipments; and (5) monitor regional capacity hubs for alternative routing options.

What role does the State of Logistics report play in carrier negotiations?

The report provides objective industry benchmarks on rates, transit times, and service levels that supply chain teams can reference during contract negotiations. Benchmarking your own performance against industry standards strengthens negotiating positions and helps identify whether quoted rates are market-competitive or whether service level commitments are realistic.

Shipping & Freight

Moderate

37th State of Logistics Report Examines Air Cargo Trends

Jul 2, 2026

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The signal

The 37th annual State of Logistics report from Logistics Management provides a comprehensive assessment of air cargo market conditions, capacity utilization, and industry trends. This benchmarking study, which is widely recognized as a definitive gauge of logistics sector health, offers insights into how air freight is responding to shifting demand patterns and market pressures. The findings carry implications for supply chain professionals managing time-sensitive shipments and high-value cargo flows.

Air cargo remains a critical but specialized segment within the broader logistics ecosystem, serving industries that prioritize speed over cost, including pharmaceuticals, electronics, and perishables. The report's analysis helps logistics teams understand capacity constraints, pricing dynamics, and operational efficiency metrics that inform strategic sourcing and transportation mode decisions. Given post-pandemic market consolidation and ongoing fuel cost volatility, the air freight landscape continues to evolve in ways that directly impact network design and carrier selection.

For supply chain leaders, this annual assessment serves as a reality check on capacity availability, competitive pressures, and the viability of air freight routes. Understanding these macro trends enables better negotiation with carriers, more accurate costing models, and improved contingency planning when air cargo becomes the necessary choice for critical shipments.

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Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

this month

What if air cargo capacity tightens by 15% due to seasonal demand surge?

Simulate a 15% reduction in available air freight capacity across major international air cargo hubs during peak season, with resulting rate increases of 20-30%. Model the impact on critical expedited shipments for electronics and pharmaceutical products, and identify which facilities would need to shift to ocean freight or ground alternatives.

Run this scenario

Simulation Suggestion

strategic

What if fuel surcharges increase by 25% and how should we adjust pricing?

Model a 25% spike in jet fuel prices triggered by geopolitical or supply disruption, translating to proportional fuel surcharges on air cargo rates. Evaluate impact on product margins for high-value, speed-dependent commodities and determine which customers can absorb surcharges versus which require mode substitution.

Run this scenario

Simulation Suggestion

this month

What if we shift 20% of expedited cargo from air to ocean+premium ground?

Evaluate cost and service-level trade-offs of converting time-sensitive shipments to a hybrid model combining ocean freight with premium ground transportation or air segments on final legs only. Model total landed cost, transit time variance, and customer service level impact for electronics and apparel categories.

Run this scenario

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